Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

GUANGZHOU AUTOMOBILE GROUP CO., LTD. 廣州汽車集團股份有限公司 (a joint stock company incorporated in the People’s Republic of with limited liability) (Stock Code: 2238)

2016 INTERIM RESULTS ANNOUNCEMENT

I. IMPORTANT NOTICE

(I) The Board, the supervisory committee and the directors, supervisors and senior management of the Company warrant that the contents contained herein are true, accurate and complete. There are no false representations or misleading statements contained in or material omissions from this announcement, and they will jointly and severally accept responsibility.

(II) All directors of the Company have attended the meetings of the Board.

(III) The interim financial report of the Company is unaudited. The Audit Committee of the Company has reviewed the unaudited interim results of the Company for the six months ended 30 June 2016 and agreed to submit it to the Board for approval.

(IV) Zhang Fangyou, the Chairman of the Company, Zeng Qinghong, the General Manager of the Company, Wang Dan, the person in charge of accounting function and Li Canhui, the manager of the accounting department (Chief of Accounting), warrant the truthfulness, accuracy and completeness of the financial report contained in this announcement.

(V) The Board of the Company proposed payment of interim dividend of RMB0.8 (tax inclusive) in cash for every 10 shares to all shareholders.

(VI) The forward-looking statements contained in this announcement regarding the Company’s future plans and development strategies do not constitute any substantive commitment to investors and investors are reminded of investment risks and to exercise caution in their investment.

(VII) There is no non-operational appropriation of the Company’s funds by its controlling shareholders and their connected parties.

(VIII) The Company has not provided any third-party guarantees in violation of stipulated decision- making procedures. 1 II. CHAIRMAN’S STATEMENT

Business Review

During the first half of the year, China adhered to the general principle of seeking progress while keeping performance stable, expanded demand appropriately and continued to implement positive fiscal policies and prudent monetary policies; and focused on pushing forward supply-side structural reform, strongly, suitably and effectively implemented the key tasks of “cutting over capacity, destocking, deleveraging, reducing costs and identifying growth areas” and comprehensively pushed forward “replacing business tax with value-added tax” pilots. Against the backdrop of continuously slow growth in the global economy, signs of stabilization were seen in the . Compared with the corresponding period last year, China’s GDP grew by 6.7%, CPI increased by 2.1%, PPI narrowed successively and the macro-economy showed a stabilising and positive trend in the first half of the year.

According to the data of China Association of Automobile Manufacturers, the overall sales growth of domestic automobile for the first half of the year grew steadily and the extent of growth was significantly higher than the corresponding period last year. The sales growth of SUV, MPV sectors and new-energy vehicles maintained at a high level. The production and sales of vehicles amounted to 12,892,200 units and 12,829,800 units, respectively in the first half of the year, representing increases of 6.47% and 8.14%, respectively, as compared with the corresponding period last year, and the growth rates of which increased by 3.83 and 6.71 percentage points, respectively, as compared with the corresponding period last year, of which the production and sales of passenger vehicles amounted to 11,099,400 units and 11,042,300 units, respectively, representing increases of 7.32% and 9.23% as compared with the corresponding period last year; the production and sales of SUV amounted to 3,903,900 units and 3,850,100 units, respectively, representing increases of 42.70% and 44.26%, respectively, as compared with the corresponding period last year, with the sales growth slightly slower than the corresponding period last year; the production and sales of MPV amounted to 1,187,100 units and 1,199,900 units, respectively, representing increases of 12.34% and 18.06%, respectively, as compared with the corresponding period last year, and the sales growth was higher than the corresponding period last year, but the production and sales of sedans decreased 5.52% and 3.91% respectively; and the production and sales of commercial vehicles amounted to 1,792,700 units and 1,787,400 units, respectively, representing increases of 1.50% and 1.87%, respectively, as compared with the corresponding period last year. In addition, the production and sales of new-energy vehicles amounted to 177,000 units and 170,000 units in the first half of the year, representing an increase of 125.0% and 126.9% as compared with the corresponding period last year. The production and sales of motorcycles experienced consistent downturn and the extent of decrease continued to increase in the first half of the year, amounted to 8,163,800 units and 8,157,700 units, respectively, representing decreases of 14.44% and 15.01%, respectively, as compared with the corresponding period last year.

The production and sales of vehicles of the Group together with its joint ventures and associated companies were 744,000 units and 731,900 units respectively, representing increases of 29.59% and 28.74% respectively compared to the corresponding period last year, of which the production and sales of SUV amounted to 350,200 units and 343,500 units, representing increases of 129.33% and 127.19% as compared to the corresponding period last year; the production and sales of motorcycles amounted to 459,000 units and 449,700 units, representing decreases of 11.60% and 15.32% respectively as compared

2 to the corresponding period last year. Together, the operating income was approximately RMB123.233 billion, representing an increase of approximately 29.40% as compared with the corresponding period last year.

The consolidated operating income of the Company amounted to approximately RMB21.429 billion, representing an increase of approximately 87.15% as compared with the corresponding period last year; the net profit attributable to shareholders of listed company amounted to RMB3.982 billion, representing an increase of approximately 127.54% as compared with the corresponding period last year; earnings per share was approximately RMB0.62, representing an increase of approximately 127.54% as compared with the corresponding period last year; and return on net assets was approximately 9.76%, representing an increase of approximately 4.93% as compared with the corresponding period last year.

During the first half of the year, the Group closely followed the objectives, thinking and tasks ascertained in the beginning of the year, insisted on seeking progress and achievement in stable development, identifying issues early, coordinating effort of all staff members, targeting efforts and taking proactive measures to effectively boost sales in the market. As a result, the year-on-year growth rate of its vehicle sales was approximately 20 percentage points higher than industrial average and its market share increased by 0.9%. The Group accomplished “half of the mission within half of the time” in terms of key operating indicators. Both quality and effectiveness of its operation were enhanced which laid a solid foundation for the beginning of the Thirteenth Five-Year Plan.

Prospects

In the second half of the year, global trade and market demand would remain subdued. The real economy of China would still be difficult and consumption growth will be stable albeit with tendency to decline. China’s economy will continue to be under downward pressure. Nevertheless, the economy of China continues to retain its upward trend in the long run, and the economy is robust, has great potential and plenty room for maneuvering while the growth momentums of hi-tech sectors, new operation formats and new business models are accelerating. Following further effort being put into the supply-side structural reform, launching of various supporting measures for deepening the reform of state-owned enterprises, active nurturing of new economic structure and reinforcing new development drivers through prudent monetary policies, it is expected that the economy will maintain its stable growth and the annual GDP growth will be around 6.5-7%. Driven by factors such as new-type industrialization, urbanization, additional purchase and trade-in, energy-saving subsidies, levying half of purchase tax for vehicles below 1.6L and rigid demand for automobiles, the automobile market will still enjoy growth brought by structural demand. Meanwhile, due to the large number of existing ownership, together with buying restrictions in major cities, traffic jams, difficult and expensive parking, the economy of sharing and the inhibition against automobile consumption resulting from pressure on energy conservation and environmental protection, it is expected that the annual growth rate of automobile sales in 2016 will be approximately 6.1%.

3 In the second half of the year, the Group will seize the opportunity brought by government’s stabilising growth, economic restructuring, comprehensive deepening of reform and implementing innovation- driven growth. Based on the development plan for Thirteenth Five-year Plan and its annual operation plan, the Group will take development as the theme, focus on efficiency and rely on the driving force of reform deepening to propel the sustaining and promising growth of the Group on the foundation of its work in the first half of the year.

III. REPORT OF THE BOARD

(1) Summary of Business of the Group

The main businesses consist of the research and development, , sales and after-sales services of passenger vehicles, commercial vehicles, motorcycles and auto-parts, the import and export of automobile-related products, automobile leasing, second-hand vehicles, logistics services, automobile disassembling, renewable resources, automobile credit, finance leasing, commercial factoring, insurance, insurance brokerage services and equity interest investment.

1. Vehicles

The Group’s passenger vehicles are mainly produced through its joint ventures Guangqi , GAC , GAC Fiat-Chrysler and GAC Mitsubishi and its subsidiaries, GAMC and GAMC Hangzhou (廣汽乘用車（杭州）公司). The Company’s passenger vehicles mainly consist of multiple series of sedans, SUV and MPV, such as Accord, Crider, Vezel, Crosstour, Odyssey, Fit, , etc.; GAC Toyota Camry, Highlander, Yaris L, E’Z, Levin, etc.; GAC Fiat-Chrysler Viaggio, Ottimo, JEEP Cherokee, JEEP Renegade, etc.; GAC Mitsubishi ASX, Pajero, etc.; GAC (GA3, GA3S•Vision, GA5, GA6, GA8, GS4, GS5, GS5•SUPER), etc.

Energy conservation and new energy products of the Group include: hybrid GAC Toyota Camry twin engine and Levin twin engine and GAC Trumpchi programmed hybrid GA5REV.

4 The Group also participates in the production of Accord sedans through its associated company Honda (China), completely oriented to foreign markets.

The commercial vehicles of the Group are mainly manufactured by GAC Hino, GAC Bus, GAC BYD and GAMC Hangzhou (廣汽乘用車（杭州）公司). Main products include light and heavy trucks, construction vehicles, pickups, large to medium-sized passenger vehicles (including purely electrically powered and hybrid), etc.

As at the end of the first half of the year, production capacity of passenger vehicles and commercial vehicles of the Group was 1,735,100 units.

2. Motorcycles

The Group manufactures motorcycles mainly through its joint venture Wuyang-Honda. Main products include standard motorcycles, sport bikes and scooters, etc.

As at the date of this announcement, the production capacity of motorcycles of the Group was 1.25 million units.

3. Parts and components

The Group’s production of auto-parts was mainly carried out through controlling, jointly controlled, investee companies and associated companies of GAC Component, a subsidiary. The auto- parts include engines, gearboxes, car seats, HVAC systems, auto lamps, automation accessories, redirectors, shock absorbers and accessories. Majority of the products were whole vehicle accessories of the Group.

4. Automobile-related services

The Group’s businesses of automobile sales, credit, insurance, finance investment, leasing, logistics and import and export and other related services are mainly carried out through GAC Commercial, GAC-SOFINCO, Urtrust Insurance, GAC Capital, GAC Leasing, Guang Ai Brokers and Tong Fang Logistics.

(2) Major Performance of the Board

In the first half of 2016, the Group actively advanced all kind of works in an orderly manner and conformed to every expectation comprehensively.

1. Record high economic results

With the Group’s dedicated efforts to production, the operational and economic quality and result were further enhanced and accomplished “half of the mission within half of the time”. The growth rate of the Group’s sales was the top among leading car manufacturers and was higher than the industrial average by 20%;

5 The Group’s product competitiveness increased continuously. The driving force of “star” products was remarkable and the sales of “star” products such as Trumpchi GS4, Highlander, Vezel and Cherokee were continuously hot. There were realised mutual support between the segments and good coordinated development;

The Group strengthened market research and improved marketing, collected primary opinion and suggestion widely, and proactively took responsive measures, which enhanced satisfaction of the distributors and boosted their confidence.

2. Breakthrough in independent business

The Group insisted on driving growth with innovation and continued to strengthen independent research and development and building its innovation capability. It implemented development projects for both traditional energy vehicle model and new energy vehicle model, pursued development of core parts such as battery and motor, as well as research and development of pioneering topics such as preparation and application research of graphene materials, and intelligent vehicle, so as to master the key core technologies and take a step ahead in technology. In the first half of the year, the Group validly applied for 182 new patents, of which 52 were invention patents, 98 practical new design patents and 32 exterior design patents; was granted 265 authorized patents, of which 33 were invention patents, 99 practical new design patents and 133 exterior design patents; and registered 24 new software copy rights.

Trumpchi launched its first high-end executive and commercial vehicle, GA8, in the first half of the year, making a breakthrough by the entering of a self developed brand into the high-end market from the mid-end market. In the first half of the year, Trumpchi models recorded sales of 159,700 units, representing a growth of 143.47%, as compared with the corresponding period last year.

3. Orderly progress of key projects

The Group’s project development yielded extensive results, which fully accelerated the expansion of products and production capacity and further optimized the Group’s industrial structure and business layout. The third production line project of GAC Toyota, the GAC Fiat Chrysler Guangzhou Plant project, capacity expansion project of GAMC and the project of GAMC Hangzhou (廣汽乘用車（杭 州）公司) all made good progress according to plans. Approval from the China Banking Regulatory Commission to establish a finance company has been obtained. The cooperation with LeEco to establish 大聖科技(Da Sheng Ke Ji) was a major breakthrough in the automative telematics ecosystem project. Such projects established an industrial structure of “one principal business with diversity” and greatly enhanced the development potential of the Group.

6 4. Achievement made in capital operation

Leveraging the advantage of domestic financing channels, the Company successfully issued 6-year period A share convertible bond of RMB4,105.58 million and issued short-term financing bonds of RMB2.3 billion at a low interest rate of 2.85%, saving finance costs of RMB 30 million. The Group also actively pursued bond issuance by GAC Component and GAC Commercial to enhance the financing capability of investment companies; and assisted the completion of listing of Urtrust Insurance on the New Third Board, which was the first car insurance company listed in China. The Group carried out investor relations management activities in an orderly manner and communicated with more than 300 investors/analysts, and strengthened market capitalization management. The Company has attracted the interest of institutional investors and its market valuation was among the top companies of the industry, with a market capitalization consistently above RMB100 billion. In the first half of the year, the Company was awarded the First Prize in the “Taurus Award Top 100 Listed Companies”.

5. Emphasis on corporate governance

The Group strengthened the formulation of regulations and rules, formulated and amended 10 internal management systems including Measures for Completion-evaluation and Post-evaluation and Award for Annual Projects; further reinforced Board composition, the operation of the “three meetings”, the management and control of investment companies and regulatory management on internal major decision, etc.; constantly improved information disclosure mechanism and made a total of 87 disclosures and 75 announcements in the markets of China and Hong Kong in the first half of the year without any error, omission or correction; regulated the management of those possessing inside information and there was no leakage of sensitive information; continued to optimize mid-and long-term incentive plans and properly conduct works such as the exercise of A Share share option.

6. Further shouldering of social responsibility

The Group is committed to be an outstanding corporate citizen, actively supports public welfare and shares the fruit of harmonized development. It was awarded the Golden Cup of Guangdong Poverty Relief Red Cotton Cup of 2015.

During the first half of the year, the Group supported sports, environmental protection, cultural education, medical relief, assistance and other public welfare and charity with contribution of over RMB15.9537 million.

IV. DISCUSSION AND ANALYSIS BY THE BOARD ON OPERATION OF THE COMPANY

During the reporting period, revenue of the Group together with its joint ventures and associated companies amounted to approximately RMB123.233 billion, representing an increase of approximately RMB27.998 billion or approximately 29.40% as compared to the corresponding period last year.

7 During the reporting period, operating revenue of the Group amounted to approximately RMB21.429 billion, representing a growth of approximately 87.15% as compared to the corresponding period last year; net profit attributable to owners of the parent company amounted to approximately RMB3.982 billion, and earnings per share amounted to RMB0.62, representing an increase of approximately 127.54% compared to the corresponding period last year.

The major factors leading to variation of results during the reporting period included:

1. Sustaining rapid growth of production and sales of GAMC, the Group’s self-developed brand, which surged by 132.84% and 143.47% respectively, and Trumpchi GS4 has become a “star” product of the Group’s self-developed brand;

2. Sustaining hot sales of joint ventures’ models such as Highlander, Vezel and Cherokee which drove the increase in overall sales and facilitated the steady increase of operating results;

3. Ancillary businesses in the upstream and downstream of industry chain such as financial services, auto-parts and commercial services grew alongside with the increase in sales volume of self-developed brand and joint ventures, which contributed to the growth of operating results.

(1) ANALYSIS ON PRINCIPAL BUSINESS

1. Analysis on changes of items in the consolidated statement of comprehensive income and the cash flow statement

Unit: RMB100 million

Corresponding period of Item Current period last year Change (%)

Revenue 214.29 114.50 87.15 Cost of sales 177.55 103.75 71.13 Selling and distribution costs 12.63 7.13 77.14 Administrative expenses 10.54 6.31 67.04 Finance costs 4.10 4.47 -8.28 Interest income 2.27 1.70 33.53 Share of profit of joint ventures and associated companies 31.64 19.16 65.14 Net cash flow generated from operating activities 28.70 -1.94 1,579.38 Net cash flow generated from investing activities -62.11 -0.28 -22,082.14 Net cash flow generated from financing activities 47.93 8.10 491.73

8 2. Revenue

During the reporting period, operating revenue of the Group amounted to approximately RMB21.429 billion, representing an increase of approximately 87.15% as compared with the corresponding period last year, mainly due to the rapid growth of sales volume of the self-developed brand “Trumpchi” of the Group and the rapid development of businesses in the upstream and downstream of industry chain such as the auto-parts and automobile after-production service.

3. Cost of sales and gross profit

During the reporting period, the Group recorded total cost of sales and business tax of approximately RMB17.755 billion, representing an increase of approximately RMB7.380 billion or approximately 71.13% as compared with the corresponding period last year. Total gross profit amounted to approximately RMB3.674 billion, representing an increase of approximately RMB2.6 billion as compared with the corresponding period last year. Gross profit margin increased by 7.76% as compared with the corresponding period last year, mainly due to the effect of economies of scale from the increased sales of passenger vehicles as well as the reduction in unit cost as a result of the strengthened cost control.

4. Expense

(1) The increase of approximately RMB550 million in costs of sales as compared with the corresponding period last year was mainly attributable to the expenses in warehousing and after- sales services increasing in line with the growth in sales and the increase in advertisement and promotion expenditure;

(2) The increase of approximately RMB423 million in administrative expenses as compared with the corresponding period last year was mainly attributable to the increase in labor costs, depreciation and amortization and R&D expenses along with the expansion of the Group;

(3) The decrease of approximately RMB37 million in finance costs as compared with the corresponding period last year was mainly attributable to the decrease in average borrowing interest rate during the reporting period, resulting in the decrease of interest expenses;

(4) The increase of approximately RMB57 million in interest income as compared with the corresponding period last year was mainly attributable to the increase of average deposit balance and enhanced funding utilization during the reporting period.

9 5. Cash flow

(1) During the reporting period, net cash inflows generated from operating activities amounted to approximately RMB2.870 billion, representing an increase of approximately RMB3.064 billion as compared with the net cash outflows of RMB0.194 billion of the corresponding period last year, which was mainly attributable to the increase in sales collection along with the increase of sales in the reporting period;

(2) During the reporting period, net cash outflows arising from investing activities amounted to approximately RMB6.211 billion, representing an increase of approximately RMB6.183 billion as compared with the net cash outflows of approximately RMB28 million in the corresponding period last year, which was mainly attributable to the increase in fixed assets acquired and installed for the expansion of capacity, increased investment in financial products and the increase in time deposits during the reporting period;

(3) During the reporting period, net cash inflows arising from financing activities amounted to approximately RMB4.793 billion, representing an increase of approximately RMB3.983 billion as compared with net cash inflows of RMB0.810 billion of the corresponding period last year, which was mainly attributable to the issuance of convertible bonds of RMB4.1 billion and the increase in cash dividend paid during the reporting period;

(4) As at 30 June 2016, cash and cash equivalent of the Group amounted to approximately RMB13.013 billion, representing an increase of approximately RMB2.147 billion as compared with approximately RMB10.866 billion as at 30 June 2015.

6. Share of profit of joint ventures and associated companies

During the reporting period, the Group’s share of profit of joint ventures and associated companies amounted to approximately RMB3.164 billion, representing an increase of approximately RMB1.248 billion as compared with the corresponding period last year, which was mainly attributable to the followings: a. the hot sales of models such as Highlander, Vezel and Cherokee drove the increase in overall sales and the steady increase of operating results of joint ventures; b. the synergies of industries continued to strengthen, the service businesses of the auto financing, auto-parts and auto logistics in the upstream and downstream of the industry chain developed rapidly.

7. Others

Income tax expense amounted to approximately RMB411 million, representing an increase of approximately RMB329 million as compared with the corresponding period last year, which was mainly attributable to the increase of profit of certain enterprises during the reporting period.

In conclusion, the net profit attributable to the parent company of the Group during the reporting period was approximately RMB3.982 billion and earnings per share were approximately RMB0.62, representing an increase of approximately 127.54% as compared with the corresponding period last year.

10 (2) ANALYSIS BY INDUSTRY, PRODUCT OR REGIONAL OPERATION

1. Principal business by industry

Unit: RMB100 million

Changes in Changes in Gross Changes in cost of gross profit Cost of Profit revenue compared sales compared margin compared By industry Revenue sales margin with last year with last year with last year (%) (%) (%) (%)

Vehicles and related trades 207.76 173.48 16.50 89.70 72.87 8.13 Others 6.53 4.06 37.83 31.39 19.41 6.24 Total 214.29 177.55 17.14 87.15 71.13 7.76

2. Principal business by product

Unit: RMB100 million

Changes in Changes in Gross Changes in cost of gross profit Cost of Profit revenue compared sales compared margin compared By industry Revenue sales margin with last year with last year with last year (%) (%) (%) (%)

Passenger vehicles 150.94 121.57 19.46 171.23 144.56 8.78 Vehicles related trades 56.61 51.65 8.76 8.03 4.98 2.65 Others 6.74 4.33 35.76 4.50 –10.54 10.80 Total 214.29 177.55 17.14 87.15 71.13 7.76

3. Principal business by region

Unit: RMB100 million

Changes in revenue as compared Region Revenue with last year (%)

Mainland China 214.23 87.13 Hong Kong 0.06 200.00 Total 214.29 87.15

11 (3) ANALYSIS ON ASSETS AND LIABILITIES

1. Table of assets and liabilities analysis

Unit: RMB100 million

Balance at Balance at Balance at the end of the end of Balance at the end of the current the period to the end of previous period Item period total assets previous period to total assets Change (%) (%) (%)

Available-for-sale financial assets 58.16 7.38 22.81 3.39 154.98 Time deposits 75.89 9.63 40.87 6.08 85.69 Borrowings 173.35 22.01 119.28 17.74 45.33 Government grants 16.43 2.09 10.77 1.60 52.55

2. Analysis on change of items

(1) Available-for-sale financial assets increased by 154.98%, mainly due to the reasonable use of funding to increase the purchase of financial products during the reporting period;

(2) Time deposits increased by 85.69%, mainly due to the reasonable arrangement of deposits structure in accordance with capital needs during the reporting period;

(3) Borrowings increased by 45.33%, mainly due to the issuance of convertible bonds of RMB4.1 billion during the reporting period;

(4) Government grants increased by 52.55%, mainly due to the receipt of government grants for research and development of new energy and products and expansion of capacity in passenger cars.

(4) ANALYSIS ON FINANCIAL POSITION

1. Financial indicators

As at 30 June 2016, the Group’s current ratio was 1.52 times, representing an increase from approximately 1.50 times as at 31 December 2015, and quick ratio was approximately 1.23 times, representing a decrease from approximately 1.31 times as at 31 December 2015, mainly due to increase in current liabilities as a result of the increase in trade payables alongside with the increase in sales.

12 2. Financial resources and capital structure

As at 30 June 2016, the Group’s current assets amounted to approximately RMB34.517 billion, current liabilities amounted to approximately RMB22.614 billion and current ratio was approximately 1.52 times. As at 30 June 2016, the Group’s total borrowings amounted to approximately RMB17.335 billion, mainly consisting of debenture issued by the Group with nominal value of RMB600 million, corporate bonds issued with nominal value of RMB6 billion, short- term financing bonds with nominal value of RMB2.3 billion, convertible bonds with nominal value of RMB4.1 billion and loans from bank and financial institutions amounting to approximately RMB4.779 billion, which resulted in a gearing ratio of approximately 28.80%. The above loans and bonds were payable upon maturity. The Group generally funds its business and operational capital needs with its own working capital. (Calculation of gearing ratio: (borrowings in non-current liabilities + borrowings in current liabilities)/(total equity + borrowings in non-current liabilities + borrowings in current liabilities)).

3. Foreign exchange risk

As the Group mainly conducts its business in the PRC and the sales and purchases of the Group in the PRC were denominated in RMB, changes in foreign exchange did not have any material effect on the Group’s operating results and cash flow during the reporting period.

4. Contingent liabilities

As at 30 June 2016, third-party guarantee committed by the Group amounted to RMB6,907,570, whereas that as at 31 December 2015 was RMB8,577,078; as at 30 June 2016, financial guarantee given by the Company to its subsidiaries amounted to RMB0, and that as at 31 December 2015 was RMB0.

(5) ANALYSIS ON CORE COMPETITIVENESS

During the reporting period, the core competitiveness of the Group is mainly reflected in:

1. Industry layouts with complete industry chain and optimised structure

The Group has formed the industry strategic layout based in South China and radiating to North China, Central China, East China and Bohai Rim Region and a complete closed-loop industry chain centering upon manufacture of vehicles and covering research and development of vehicles and parts and components in the upstream and automobile service and financial investment in the downstream; and has become one of the automobile groups with the most integrated industry chain and the most optimized industry layout in China. The synergy in the upstream and downstream of the industry chain progressed gradually; new profit growth points are emerging and the comprehensive competitiveness of the Group has been constantly enhanced.

13 2. Advanced manufacturing, craftsmanship, quality and procedure management

The Group has comprehensive advantages in terms of manufacturing, craftsmanship, quality and procedure management, mainly including:

(1) world leading quality advantage; (2) innovation advantage brought by “continued improvement”; (3) cost advantage brought by seeking for greater perfection.

3. Enriched product line and optimized product structure

The Group has a full range of products including sedans, SUV, MPV, etc., and it actively promotes the iteration of products based on the changes in the markets and the demand of consumers. It maintained customer loyalty and a widely recognised brand reputation.

4. Initialised the “GAC Model” of the research and development and production system of self- developed brand

Through introducing, digesting, absorbing and re-innovating, the Group formulated a world class production system. The Group integrated global resources and established a cross-platform and modular-structured R&D system so as to acquire the advantage of integrated R&D innovation.

5. Worldwide connecting capital operation platforms

The Group successfully built capital operation platforms in both A share and H share markets, which was favourable to the Group by allowing it to leverage on the myriad of investment and financing tools of domestic and overseas capital markets and through the integration of internal and external growth, the Group achieved effective resource allocation, capital appreciation and maximisation of corporate value.

14 V. PROFIT DISTRIBUTION PLAN OR CONVERSION OF CAPITAL RESERVES

1. Implementation or adjustment of profit distribution plan during the reporting period

Upon the consideration and approval at the 2015 annual general meeting of shareholders of the Company held on 27 May 2016, the Company proposed to declare dividend of RMB1.2 (tax inclusive) in cash for every 10 shares to all shareholders and such dividend had already been distributed.

2. Declared half-year profit distribution plan and conversion of capital reserves

Whether making profit distribution or converting surplus reserves into Yes share capital

Number of bonus share for every 10 shares 0

Amount of cash dividend for every 10 shares (RMB) (including tax) 0.8

Number of shares converted for every 10 shares 0

Relevant Explanation on Profit Distribution Plan or Plan to Convert Surplus Reserves into Shares

At the 29th meeting of the 4th Session of the Board of the Company, the 2016 interim profit distribution plan was considered and it was decided that a cash dividend of RMB0.8 per 10 shares (tax inclusive) shall be distributed to all Shareholders of the Company, which is expected to be paid to the Shareholders on or before 25 October 2016.

VI. OTHER DISCLOSURES

1. Production safety

The Group adhered to the guidelines of safety first, focus on prevention and comprehensive control, strictly implemented accountability system for production safety, and performed duties of supervising and directing the safety management work of every investment company. It continued to enhance the targeted management of safety production responsibilities, comprehensively carried out the standardized production safety, improved the emergency rescue system for production safety accidents, actively carried out the propaganda and training of safety production and handling of potential accident hazards, and actively and practically enhanced the cultural construction of safety.

During the first half of the year, the Group and every investment company had experienced no serious injury or above accidents, and its safety production condition remained stable in general.

15 2. Environmental protection

The Group focused on the targets of energy conservation, emission reduction, sewage reduction and efficiency improvement, dedicated to the development of energy-conserving and new energy vehicles, increased promotion of green vehicle models, and strengthened the popularity of sustainable vehicles. It continued to carry out a wide range of energy conservation and emission reduction activities, practiced green living and enhance staff’s environmental protection awareness, applying green and eco-friendly philosophy and promoting construction of smart intensive eco- friendly factories (smart ssc) when constructing factories, and put into practice the new concept of environmental protection for corporate citizens.

3. Remuneration and legal rights of employees

As at 30 June 2016, the number of registered employees of the Group (including its investees) amounted to 69,686.

Based on its overall development plan, the Group took further steps to establish and improve various human resource management systems and attached importance to maintaining the market competitiveness of its remuneration. By studying and analyzing market remuneration data, CPI growth rate and industry benchmark, the Group reviewed its remuneration system and popularized a salary negotiation mechanism, so as to ensure that the remuneration system plays an incentive role in attracting and retaining talents.

At the same time, the Group advocated the implementation of performance-linked remuneration policy, continuously improved the performance evaluation system, paid attention to the management of evaluation result and procedures and motivated employees to enhance efficiency and performance.

The Group respects the legal rights of employee, formulates rules and systems relating to human resources management according to laws, signs labour contract with them and implements collective contract negotiation. It attached great importance to the establishment and improvement of employee benefits system, made timely and full-amount contributions to various social insurances, housing provident funds and other statutory benefit schemes, abided by the regulations on work time, breaks and leaves; certain investees of the Group have established benefits systems including supplementary medical insurance, supplementary pension insurance (or enterprise annuity).

VII. SIGNIFICANT EVENTS

1. Material litigations, arbitrations and matters generally questioned by the media

During the reporting period, the Company was not involved in any material litigation, arbitration or matters generally questioned by the media.

16 2. Matters relating to insolvency or restructuring

The Company held the 24th meeting of the 4th Session of the Board on 9 May 2016, at which it was agreed that due to continuous losses, GAC Hino (Shenyang) Motor Co., Ltd., a wholly-owned subsidiary of the Company, will be dissolved according to relevant laws and regulations. Currently, the liquidation is progressing according to prescribed procedures.

3. Transaction of assets and merger of business

1. Matters concerning acquisition and disposal of assets as well as merger of business of the Company that had been disclosed in the provisional announcements and had no changes in subsequent implementation

Description and nature Query Index

Acquisition of 49% equity interests in GAC On 18 March 2016, the “Announcement on Automobile Co., Ltd. held by Zhejiang Decision of the 17th Meeting of the 4th Session Gonow Holdings Limited, by Guangzhou of the Board” was disclosed on the websites Automobile Group Motor Co. Ltd., a wholly- of SSE and . owned subsidiary of the Company. (Announcement No.: Lin 2016-022)

4. Implementation of the share option incentive scheme and its effect

1. Matters concerning share option incentives that had been disclosed in the provisional announcement and had no changes in subsequent implementation

Description Query Index

The Group approved the “Scheme of H The “Announcement on Implementation Share Appreciation Rights and the first grant Progress of First Grant Plan of H Share scheme”. The targeted participants included the Appreciation Rights” was disclosed on the directors, senior management, key technical and websites of SSE and the Hong Kong Stock management staff of the Group. As the grant Exchange on 3 March 2016 stating as the condition with respect to the results was not met, grant condition with respect to the results the third session of H share appreciation rights has was not met, the remaining unvested share lapsed. appreciation rights of 11,949,962 shares has lapsed. As a result, all H share appreciation rights first granted by the Company has lapsed. (Announcement No.: Lin 2016-018)

VIII. MATERIAL CONTRACTS AND THEIR PERFORMANCE

1. Trusts, contracts and lease arrangements

The Company had no trusts, contracts or lease arrangements during the reporting period.

17 2. Guarantee

Unit: RMB

External Guarantee of the Company (excluding those provided to subsidiaries) Relationship Date of Whether between guarantee The Whether guarantee guarantor (Date of Commencement guarantee counter is provided and listed Guaranteed signing date of Expiry date of Type of is fully Overdue guarantee is to related Guarantor company Guarantee amount agreement) guarantee guarantee guarantee performed Overdue amount available parties Relationship Guangzhou wholly-owned Foshan City Nan Hai 6,456,450 25 July 19 September 19 September Suretyship No No 0 No No Automobile subsidiary Fo Guang Public Motor 2014 2014 2019 of joint Group Autobus Company (佛山市南海佛 and several Co., Ltd 廣公共汽車有限公司) liability GAC Hino (Shenyang) wholly-owned Guangzhou Yang Cheng 451,120 1 December 1 December 30 November Suretyship No No 0 No No Motors Co., Ltd subsidiary Zhi Lv Tourism and 2014 2014 2016 of joint Transport Co., Ltd.(廣州羊 and several 城之旅旅遊運輸有限公司) liability Guangzhou wholly-owned Guangzhou United 4,220,000 26 March 26 March 26 March Suretyship No No 0 No Yes Associated Automobile Group subsidiary Exchange Park Business 2015 2015 2018 of joint company Business Co., Ltd Investment Co., Ltd. (廣州 and several 聯合交易園區經營投資有 liability 限公司) Guangzhou wholly-owned Guangzhou United 81,490,000 26 March 26 March 26 March Suretyship No No 0 No Yes Associated Automobile Group subsidiary Exchange Park Business 2015 2015 2018 of joint company Business Co., Ltd Investment Co., Ltd. (廣州 and several 聯合交易園區經營投資有 liability 限公司) Total guarantee incurred during the reporting period (excluding those provided to subsidiaries) Total balance of guarantee as at the end of the reporting period (A) (excluding those provided to subsidiaries) 92,617,570 Guarantee provided to subsidiaries of the Company Total guarantee provided to subsidiaries of the Company during the reporting period Total balance of guarantee provided to subsidiaries of the Company as at the end of the reporting period(B) Total guarantee of the Company (including those provided to subsidiaries) Total guarantee (A+B) 92,617,570 Proportion of total guarantee in the net assets of the Company (%) 0.22 In which: Amount of guarantees provided for shareholders, ultimate controllers and its connected parties (C) Amount of debt guarantees provided directly or indirectly for companies with gearing ratio of over 70% (D) Total amount of guarantees in excess of 50% of net assets (E) Sum of the above three guaranteed items (C+D+E) Description on outstanding guarantees which may bear several and joint liability Description on guarantees

18 IX. CONVERTIBLE BOND OF THE COMPANY

1. Issuance of convertible bonds

According to the “Reply relating to Approval of the Issuance of Convertible Bonds by Guangzhou Automobile Group Co., Ltd.”(《關於核准廣州汽車集團股份有限公司公開發行可轉換公司 債券的批復》) (Zheng Jian Xu Ke [2015] No.3131) issued by the China Securities Regulatory Commission dated 30 December 2015, the Company was approved to publicly issue at par a total of RMB4,105.58 million 6-year term convertible bonds of nominal value RMB100 each on 22 January 2016.

With the approval from the Shanghai Stock Exchange (Self-regulation Decision [2016] No.26 (自律 監管決定書[2016]26號文)), the convertible bonds amounting to RMB4,105.58 million issued by the Company was listed and traded on the Shanghai Stock Exchange from 4 February 2016.

2. Holders and guarantors of convertible bonds during the reporting period

Number of holders of the Company’s convertible bonds as at the end of 1,306 the period Guarantor of the Company’s convertible bonds Nil Top ten holders of the Company’s convertible bonds: Holders of the Company’s convertible bonds Amount held at the end Holding proportion (%) of the period (RMB) China Construction Bank Corporation －Huashang Shuang Zhai Feng Li 217,386,000 5.29% Bond Securities Fund (華商雙債豐利債券型證券投資基金) Industrial and Commercial Bank of China Limited － E Fund 172,860,000 4.21% Management Anxin Huibao Bond Securities Investment Fund (易方達安 心回報債券型證券投資基金) Guotai Junan Securities Co., Ltd. 154,900,000 3.77% Pingan Anyi Fixed-Income Pension Product (平安安益固定收益型養老金 128,813,000 3.14% 產品)－China Construction Bank Corporation China Galaxy Securities Co., Ltd. 110,686,000 2.70% China Construction Bank Corporation－Huashang Shouyi Zengqiang 108,783,000 2.65% Bond Securities Investment Fund (華商收益增強債券型證券投資基金) Ping An Insurance (Group) Company of China, Ltd. Enterprise Annuity 67,165,000 1.64% Plan－China Merchants Bank Co., Ltd. Zhongrong Fund －Bank of Nanjing－Rongxin No.1 Asset Management 62,000,000 1.51% Plan (融鑫1 號資產管理計劃) Industrial and Commercial Bank of China Limited－Nanfang Guan Li 54,985,000 1.34% Huibao Bond Securities Investment Fund (南方廣利回報債券型證券投資 基金) China Construction Bank－Huaan Stable Yield Bond Securities 50,000,000 1.22% Investment Fund (華安穩定收益債券型證券投資基金)

19 3. Changes in the convertible bonds during the reporting period

Name of Prior to current Increase/decrease in After current convertible bond changes the current changes changes Converted Redeemed Resold

GAC Convertible 4,105,580,000 4,105,580,000 Bonds

4. Aggregated conversion of convertible bonds during the reporting period

Amount of shares converted during the reporting period (RMB) 0 Number of shares converted during the reporting period 0 Aggregated number of shares converted 0 Aggregated number of shares converted per the total number of shares issued by the Company before conversion (%) 0 Outstanding convertible bonds (RMB) 4,105,580,000 Outstanding convertible bonds per the total 100 number of convertible bonds issued

5. Adjustments in the conversion prices

Unit: RMB

Date of conversion Conversion Date of Media of Description of the price adjustment price after disclosure disclosure conversion price adjustment adjustment

21 June 2016 RMB21.87 13 June 2016 China Securities In connection with the Journal, Shanghai implementation of cash Securities News, dividend distribution Securities Times plan of 2015, the and Securities conversion price of GAC Daily Convertible Bonds was adjusted from RMB21.99 per share to RMB 21.87 per share The latest conversion price as at the RMB21.87 end of the reporting period

20 6. Information on the Company’s liability and credit changes as well as the cash arrangement for the future annual debt repayment

United Credit Ratings Co., Ltd. provided continuing credit rating for the convertible bonds of the Company and issued the “Credit Report for the Convertible bonds of Guangzhou Automobile Group Co., Ltd.” (Lian He Ping Zi [2016] No.470) on 25 May 2016. The Credit Report maintained the AAA credit rating of the convertible bonds of the Company and maintained the AAA long-term credit rating of the Company (as issuer) with stable outlook.

X. CORPORATE GOVERNANCE

The Group strictly complied with the requirements relating to corporate governance under the “Company Law”, the “Securities Law”, “Corporate Governance Guidelines of Listed Companies”, “Listing Rules of the Shanghai Stock Exchange”, “Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited” and its appendix, “Corporate Governance Code”. The Group has established relatively sound governance structure, and to adapt to the need of sustainable development, further enhanced management structure, standardized operations and established new systems and mechanisms through innovation and reform. During the reporting period, the corporate governance of the Company was the same as required by the Company Law and relevant provisions of CSRC.

During the reporting period, a total of 1 general meeting, 12 Board meetings, 4 meetings of the Supervisory Committee were held, and the procedures of the convening, holding and considering and voting for meetings have been in strict compliance with the Articles of Association and rules of proceedings.

During the operational decision-making process, the special committees of the Board fully played their roles. During the reporting period, a total of 4 Audit Committee meetings, 3 Nomination Committee meetings, 2 Remuneration and Evaluation Committee meetings and 1 Strategy Committee meeting were held, which provided effective decision-making support for the investments in significant projects, and provided active and effective recommendations and advices for the preparation of periodic reports in compliance with applicable regulations and the continuous improvement of internal control mechanism of the Company.

During the reporting period, the Company formulated detailed rules for the annual review of key projects and related systems, further improved the basic management system and provided solid foundation for the continuous improvement of working efficiency and management level for the corporate governance.

In addition, in accordance with the requirement of Basic Principles for Internal Control of Enterprises and Guidelines of Shanghai Stock Exchange for the Internal Control of Listed Companies, the Company prepared and disclosed 2015 evaluation report of internal control and engaged intermediaries to audit the internal control of the Company.

21 XI. PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY

The Company had not redeemed any of its listed securities during the reporting period. Neither the Company nor any of its subsidiaries had purchased or sold any of the Company’s listed securities during the reporting period.

XII. CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Unaudited Six months ended 30 June Note 2016 2015 RMB’000 RMB’000

Revenue 4 21,429,106 11,449,667 Cost of sales (17,754,631) (10,374,780)

Gross profit 3,674,475 1,074,887

Selling and distribution costs (1,263,490) (712,550) Administrative expenses (1,054,385) (630,771) Interest income 177,805 113,479 Other gains-net 88,284 431,718

Operating profit 5 1,622,689 276,763

Finance costs 6 (410,411) (446,759) Interest income 48,829 56,334 Share of profit of joint ventures and associates 7 3,163,769 1,916,124

Profit before income tax 4,424,876 1,802,462

Income tax expense 8 (410,605) (81,194)

Profit for the period 4,014,271 1,721,268

Other comprehensive (loss)/income Items that may be reclassified subsequently to profit or loss-change in value of available-for-sale financial assets, net of tax (13,987) 21,599

Total comprehensive income for the period 4,000,284 1,742,867

22 Unaudited Six months ended 30 June Note 2016 2015 RMB’000 RMB’000

Profit/(loss) attributable to: – Equity holders of the Company 3,981,548 1,749,629 – Non-controlling interests 32,723 (28,361)

4,014,271 1,721,268

Total comprehensive income/(loss) attributable to: – Equity holders of the Company 3,972,677 1,760,142 – Non-controlling interests 27,607 (17,275)

4,000,284 1,742,867

Earnings per share attributable to owners of the Company (expressed in RMB per share) – basic 9 0.62 0.27

– diluted 9 0.60 0.27

23 INTERIM CONSOLIDATED BALANCE SHEET

Unaudited Audited 30 June 31 December Note 2016 2015 RMB’000 RMB’000

ASSETS Non-current assets Land use rights 1,840,372 1,819,702 Property, plant and equipment 12,120,756 10,581,208 Investment properties 363,182 343,958 Intangible assets 4,930,315 4,826,902 Investments in joint ventures and associates 7 21,673,476 18,478,158 Deferred income tax assets 536,912 440,538 Available-for-sale financial assets 2,139,191 2,035,344 Held-to-maturity investments 16,712 79,854 Prepayments and long term receivables 633,111 620,125

44,254,027 39,225,789

Current assets Inventories 1,923,303 1,926,988 Trade and other receivables 11 7,120,544 8,726,885 Available-for-sale financial assets 3,677,004 245,482 Held-to-maturity investments 59,908 40,000 Financial assets at fair value through profit or loss 530,189 486,531 Time deposits 7,589,281 4,086,517 Restricted cash 508,537 837,094 Cash and cash equivalents 13,012,707 11,548,480

34,421,473 27,897,977

Non-current assets held for sale 95,922 95,922

34,517,395 27,993,899

Total assets 78,771,422 67,219,688

EQUITY Equity attributable to owners of the Company Share capital 6,435,019 6,435,019 Other reserves 11,358,114 11,321,467 Retained earnings 24,099,369 20,890,023

41,892,502 38,646,509 Non-controlling interests 962,248 844,811

Total equity 42,854,750 39,491,320

24 Unaudited Audited 30 June 31 December Note 2016 2015 RMB’000 RMB’000

LIABILITIES Non-current liabilities Trade and other payables 12 67,806 74,331 Borrowings 11,286,067 7,648,901 Deferred income tax liabilities 47,140 41,607 Provisions 258,644 230,813 Government grants 1,642,588 1,076,795

13,302,245 9,072,447

Current liabilities Trade and other payables 12 16,101,599 14,076,709 Current income tax liabilities 463,650 300,491 Borrowings 6,049,178 4,278,721

22,614,427 18,655,921

Total liabilities 35,916,672 27,728,368

Total equity and liabilities 78,771,422 67,219,688

25 NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1 General information

Guangzhou Automobile Group Co., Ltd. (the “Company”) and its subsidiaries (together, the “Group”) are principally engaged in the manufacturing and sales of passenger vehicles, commercial vehicles, engines and auto parts.

The registered address of the Company is 23/F, Chengyue Building, No. 448-No. 458, Dong Feng Zhong Road, Yuexiu District, Guangzhou, Guangdong, the PRC.

The Company was established in June 1997 as a limited liability company in the PRC. In June 2005, the Company underwent a reorganisation and transformed itself into a joint stock limited liability company under the PRC Company Law by converting its registered share capital and reserve as of 30 June 2004 into 3,499,665,555 shares at RMB 1 each. In 2009, the Company issued additional 435,091,902 shares at par value of RMB 1 each to all its shareholders. After the capital injection and as of 31 December 2009, the Company’s total issued domestic shares were 3,934,757,457.

The Company privatised Limited (“Denway”), a subsidiary listed on the Hong Kong Stock Exchange (the “HKSE”) on 27 August 2010. Thereafter, Denway has become a wholly-owned subsidiary of the Company. The Company’s 2,213,300,218 newly issued shares for privatisation of Denway were then listed on the HKSE by way of Introduction on 30 August 2010.

The Company previously held 29% interests in GAC Co., Ltd. (“GAC Changfeng”, which was listed on the Shanghai Stock Exchange (“SSE”)). Subsequent to the approval by the Company’s shareholders and China Securities Regulatory Commission, the Company paid cash and issued 286,962,422 RMB ordinary shares of the Company to acquire the remaining interests of GAC Changfeng. GAC Changfeng was then delisted from SSE and became a wholly-owned subsidiary of the Company. On 29 March 2012, the Company was listed on the SSE.

This condensed consolidated interim financial information is presented in thousands of Renminbi (“RMB”) Yuan, unless otherwise stated. This condensed consolidated interim financial information was approved for issue on 26 August 2016.

This condensed consolidated interim financial information has not been audited.

2 Basis of preparation

This condensed consolidated interim financial information for the six months ended 30 June 2016 has been prepared in accordance with HKAS 34, ‘Interim financial reporting’.

The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2015, which have been prepared in accordance with HKFRSs.

3 Accounting policies

Except as described below, the accounting policies applied in the condensed consolidated financial information are consistent with those described in the annual financial statements for the year ended 31 December 2015.

Taxes on income in the interim periods have been accrued using the tax rate that would be applicable to the estimated annual earnings.

26 (a) The following new standards and amendments, revisions and interpretation to existing standards are mandatory for the first time for the financial year beginning 1 January 2016:

Standards/Interpretation Subject of amendment

HKFRS 14 Regulatory Deferral Accounts Amendment to HKFRS 11 Accounting for acquisitions of interests in joint operations Amendments to HKAS 16 and HKAS 38 Clarification of acceptable methods of depreciation and amortisation Amendments to HKAS 16 and HKAS 41 Agriculture: bearer plants Amendment to HKAS 27 Equity method in separate financial statements Annual improvements 2014 Annual improvements 2012-2014 cycle Amendments to HKFRS 10, HKFRS 12 Investment entities: applying the consolidation and HKAS 28 exception Amendments to HKAS 1 Disclosure initiative

The adoption of above new standards and amendments does not have material impact on the results and financial position of the Group.

(b) The following new standards and amendments, revisions and interpretations to standards have been issued but are not effective for the financial year beginning 1 January 2016 and have not been early adopted:

Effective for accounting periods beginning on Standards/Interpretation Subject of amendment or after

Amendments to HKFRS 12 Income taxes 1 January 2017 Amendments to HKFRS 7 Statement of cash flows 1 January 2017 HKFRS 15 Revenue from Contracts 1 January 2018 with Customers HKFRS 9 Financial Instruments 1 January 2018 HKFRS 16 Leases 1 January 2019 Amendments to HKFRS 10 Sale or contribution of assets between To be determined and HKAS 28 an investor and its associate or joint venture

The Group is in the process of making an assessment of their impact and is not yet in a position to state whether any substantial changes to the Group’s significant accounting policies and presentation of the financial information.

4 Segment information

The chief operating decision-maker has been identified as the executive directors. The executive directors review the Group’s internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports.

For management purpose, the executive directors considered the nature of the Group’s products and services and determined that the Group has two reportable operating segments as follows:

27 Vehicles and related operations segment – production and sale of a variety of passenger vehicles, commercial vehicles, automotive parts and related operations;

Others – mainly production and sale of motorcycles, automobile finance and insurance, and investing business.

Certain operating segments have been aggregated into one reportable segment as they have similar expected growth rates.

Sales between segments are carried out on terms equivalent to those that prevail in arm’s length transactions. The revenue from external parties reported to the executive directors is measured in a manner consistent with that in the interim consolidated statement of comprehensive income.

During the six months ended 30 June 2016, no revenue from transactions with a single external customer counted to 10% or more of the Group’s total revenue.

The segment results for the six months ended 30 June 2016 and 30 June 2015 and other segment items included in the interim consolidated statement of comprehensive income are as follows:

Vehicles and related operations Others Eliminations Unallocated Consolidated RMB’ 000 RMB’000 RMB’ 000 RMB’ 000 RMB’ 000

Six months ended 30 June 2016 Total gross segment revenue 20,799,358 682,702 (52,954) 21,429,106 Internal revenue (23,405) (29,549) 52,954 –

Revenue (from external customers) 20,775,953 653,153 – 21,429,106

Segment results 1,517,065 91,868 (360) – 1,608,573 Unallocated income-Headquarter interest income 39,748 39,748 Unallocated costs-Headquarter expenditure (25,632) (25,632)

Operating profits 1,622,689 Finance costs (168,851) (796) – (240,764) (410,411) Interest income 26,898 1,007 – 20,924 48,829 Share of profit of joint ventures and associates 3,029,035 134,734 – – 3,163,769

Profit before income tax 4,424,876 Income tax expense (396,016) (14,589) – – (410,605)

Profit for the period 4,014,271

28 Vehicles and related operations Others Eliminations Unallocated Consolidated RMB’ 000 RMB’000 RMB’ 000 RMB’ 000 RMB’ 000

Six months ended 30 June 2015 Total gross segment revenue 10,977,158 511,024 (38,515) 11,449,667 Internal revenue (24,946) (13,569) 38,515 –

Revenue (from external customers) 10,952,212 497,455 – 11,449,667

Segment results (101,450) 36,581 (20,115) – (84,984) Unallocated income-Headquarter interest income 69,405 69,405 Unallocated income-Headquarter government grant income 300,210 300,210 Unallocated costs-Headquarter expenditure (7,868) (7,868)

Operating profits 276,763 Finance costs (151,968) (1,613) – (293,178) (446,759) Interest income 20,552 833 – 34,949 56,334 Share of profit of joint ventures and associates 1,741,657 174,467 – – 1,916,124

Profit before income tax 1,802,462 Income tax expense (67,960) (13,219) – (15) (81,194)

Profit for the period 1,721,268

The segment assets and liabilities as at 30 June 2016 and 31 December 2015 are as follows:

Vehicles and related operations Others Eliminations Unallocated Consolidated RMB’ 000 RMB’ 000 RMB’ 000 RMB’ 000 RMB’ 000

Total assets

At 30 June 2016 57,306,795 11,034,607 (13,889,975) 24,319,995 78,771,422

At 31 December 2015 48,087,334 8,614,956 (7,405,435) 17,922,833 67,219,688

Total liabilities

At 30 June 2016 22,253,798 8,731,606 (13,889,975) 18,821,243 35,916,672

At 31 December 2015 19,149,256 6,243,336 (7,404,831) 9,740,607 27,728,368

29 5 Operating profit

The following items have been charged to the operating profit during the period:

Unaudited Six months ended 30 June 2016 2015 RMB’000 RMB’000

Depreciation and amortisation 921,300 725,710 Impairment charges of intangible assets 228,650 – Impairment charges of inventories 13,503 (52) Provision for impairment loss of trade and other receivables (3,193) (29,818) Staff costs 1,800,107 1,320,771 Gain on diposal of property, plant and equipment (11,832) (2,409) Government grants (70,819) (482,440) Donation 15,954 496

6 Finance costs

Unaudited Six months ended 30 June 2016 2015 RMB’000 RMB’000

Interest expense 396,412 428,058 Others 13,999 18,701

410,411 446,759

7 Investments in joint ventures and associates

The amounts recognised in the consolidated balance sheet are as follows:

Unaudited Audited 30 June 2016 31 December 2015 RMB’000 RMB’000

Investments in joint ventures 16,136,214 12,966,481 Investments in associates 5,537,262 5,511,677

21,673,476 18,478,158

30 The amounts recognised in the consolidated statement of comprehensive income are as follows:

Unaudited Six months ended 30 June 2016 2015 RMB’000 RMB’000

Share of profit of joint ventures (Note (i)) 2,661,374 1,453,226 Share of profit of associates (Note (i)) 491,073 462,898 Government subsidy compensating for the share of loss in a joint venture 11,322 –

3,163,769 1,916,124

(i) Unrealised profits or losses resulting from up stream and down stream transactions are eliminated.

7.1 Investments in joint ventures

(a) Movements of investments in joint ventures are set out as follows:

Unaudited Six months ended 30 June 2016 2015 RMB’000 RMB’000

Beginning of the period 12,966,481 13,424,452 Additions 606,738 648,200 Share of profit 2,676,026 1,421,983 Disposals – (25,756) Dividends declared (113,031) (2,064,659)

End of the period 16,136,214 13,404,220

(b) Summarised financial information for joint ventures

Set out below is the summary of combined financial information for all the joint ventures of the Group (excluding goodwill). As restricted by the confidentiality agreements entered into with other shareholders of certain joint ventures, the Group has not disclosed certain financial data of material joint ventures separately. The aggregate of the financial information of the seven material joint ventures identified by Directors cover over 90% of combined financial information of all the joint ventures of the Group listed below.

The below financial information of the joint ventures has been consistently measured based on the fair values of the identifiable assets acquired and the liabilities assumed at the date of acquisition.

The information below reflects the amounts presented in the financial statements of the joint ventures (and not the Group’s share of those amounts) adjusted for differences in accounting policies between the Group and the joint ventures.

31 Summarised balance sheet

Unaudited Audited 30 June 2016 31 December 2015 RMB’000 RMB’000

Assets Non-current assets 30,597,058 29,435,534

Current assets – Cash and cash equivalents 21,803,059 23,542,801 – Other current assets 47,411,678 44,943,305

69,214,737 68,486,106

Total assets 99,811,795 97,921,640

Liabilities Non-current liabilities – Financial liabilities (excluding trade and other payables) 8,220,843 7,184,736 – Other non-current liabilities (including trade and other payables) 3,887,047 3,497,192

12,107,890 10,681,928

Current liabilities – Financial liabilities (excluding trade and other payables) 16,399,779 16,749,389 – Other current liabilities (including trade and other payables) 44,955,777 50,518,592

61,355,556 67,267,981

Total liabilities 73,463,446 77,949,909

Net assets 26,348,349 19,971,731 Less: Non-controlling interests (16,347) (17,225)

26,332,002 19,954,506

32 Summarised statement of comprehensive income

Unaudited Six months ended 30 June 2016 2015 RMB’000 RMB’000

Revenue 82,136,947 65,366,474 Cost of sales (67,475,552) (56,144,358) Other expenditures (9,301,834) (6,332,554)

Profit after tax 5,359,561 2,889,562 Add: losses/(gains) shared by non-controlling interests 879 (461)

5,360,440 2,889,101 Other comprehensive income – –

Total comprehensive income 5,360,440 2,889,101

8 Income tax expense

Hong Kong profits tax and China enterprise income tax have been provided at the rate of taxation prevailing in the regions in which the Group operates respectively.

The amount of taxation credited to the interim consolidated statement of comprehensive income:

Unaudited Six months ended 30 June 2016 2015 RMB’000 RMB’000

Current income tax 496,829 32,667 Deferred income tax (86,224) 48,527

410,605 81,194

(i) Income tax expense is recognised based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year.

The tax rates applicable to the Company and its major subsidiaries for the six months ended 30 June 2016 are 15% or 25% (2015: 15% or 25%).

33 9 Earnings per share

(a) Basic

Basic earnings per share is calculated by dividing the consolidated profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

Unaudited Six months ended 30 June 2016 2015 RMB’000 RMB’000

Profit attributable to equity holders of the Company 3,981,548 1,749,629 Weighted average number of ordinary shares in issue (thousands) 6,435,019 6,435,019

Basic earnings per share (RMB per share) 0.62 0.27

(b) Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company had two categories of dilutive potential ordinary shares: convertible bonds and share options. The convertible bonds are assumed to have been converted into ordinary shares, and the net profit is adjusted to eliminate the interest expense less the tax effect. For the share options, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average market share price of the company’s shares for six months ended 30 June 2016) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.

Unaudited Six months ended 30 June 2016 2015 RMB’000 RMB’000

Profit attributable to equity holders of the Company 3,981,548 1,749,629 Add: Interest expense on convertible bonds (net of tax) 33,685 -

Profit used to determine diluted earnings per share 4,015,233 1,749,629

Weighted average number of ordinary shares in issue (thousands) 6,435,019 6,435,019 Add: weighted average number of ordinary shares assuming conversion of all share options (thousands) 38,606 19,809 Add: weighted average number of ordinary shares assuming conversion of all convertible bonds (thousands) 166,066 -

Weighted average number of ordinary shares in issue for diluted earnings per share (thousands) 6,639,691 6,454,828

Diluted earnings per share (RMB per share) 0.60 0.27

34 10 Dividends

Unaudited Six months ended 30 June 2016 2015 RMB’000 RMB’000

Interim dividend declared: RMB 0.08 (2015: RMB 0.08) 514,802 514,802

Dividend paid in six months ended 30 June 2016 was approximately RMB 772,202,000 (2015: nil).

In addition, an interim dividend of RMB 0.08 per share (2015: RMB 0.08) was declared by the board of directors on 26 August 2016. This interim dividend, amounting to approximately RMB 514,802,000 (2015: RMB 514,802,000), has not been recognised as a liability in this interim financial information.

11 Trade and other receivables

Sales of passenger vehicles were normally made with advances from customers. Sales of other products were made on credit terms ranging from 2 to 170 days.

As at 30 June 2016 and 31 December 2015, the ageing analysis of these trade receivables is presented on the basis of the date of the relevant invoices as follows:

Unaudited Audited 30 June 2016 31 December 2015 RMB’000 RMB’000

Trade receivables

Within 3 months 862,085 633,490 Between 3 months and 1 year 67,302 76,841 Between 1 and 2 years 62,054 20,436 Between 2 and 3 years 12,460 24,998 Over 3 years 154,498 137,013

1,158,399 892,778

Less: Provision for impairment (162,033) (160,310)

Trade receivables-net 996,366 732,468

35 12 Trade and other payables

As at 30 June 2016 and 31 December 2015, ageing analysis of trade payables is presented on the basis of the date of the relevant invoices as follows:

Unaudited Audited 30 June 2016 31 December 2015 RMB’000 RMB’000

Trade payables

Within 1 year 7,279,445 6,592,829 Between 1 and 2 years 794,197 59,023 Between 2 and 3 years 12,553 13,038 Over 3 years 13,603 9,083

8,099,798 6,673,973

XIII. DEFINITIONS

In this announcement, unless the context otherwise requires, all terms used shall have the following meanings:

“Associated companies, all entities over which the Group has significant influence but not associated enterprises” control, generally accompanying a shareholding of between 20% and 50% of the voting rights of such entities

“Board” the board of directors

“Company” or “GAC” Guangzhou Automobile Group Co., Ltd. (廣州汽車集團股份有限 公司)

“Company Law” Company Law of the PRC

“CSRC” China Securities Regulatory Commission

“GAC Bus” Guangzhou Automobile Group Autobus Co., Ltd (廣州汽車集團 客車有限公司) (formerly known as Guangzhou Denway Bus Co., Ltd (廣州駿威客車有限公司)), a wholly-owned subsidiary of the Group incorporated on 18 January 1993 under PRC law

“GAC BYD” Guangzhou GAC BYD New Energy Passenger Vehicle Co., Ltd. ( 廣州廣汽比亞迪新能源客車有限公司), an associated company incorporated on 4 August 2014 under PRC law by the Group and BYD Company Limited, and the Group holds 49% of its equity interest

36 “GAC Capital” GAC Capital Co., Ltd. (廣汽資本有限公司), a wholly-owned subsidiary of the Company incorporated in April 2013 under PRC Law

“GAC Commercial” Guangzhou Automobile Group Business Co., Ltd (廣州汽車集團商 貿有限公司), a wholly-owned subsidiary of the Group incorporated on 21 March 2000 under PRC law

“GAC Component” Guangzhou Automobile Group Component Co., Ltd. (廣州汽車集 團零部件有限公司), a wholly-owned subsidiary incorporated on 29 August 2000 under PRC law and jointly funded by the Group and its subsidiaries

“GAC Fiat-Chrysler” GAC FIAT Automobiles Co., Ltd. (廣汽菲亞特汽車有限公司), a jointly controlled entity incorporated on 9 March 2010 under PRC law by Fiat Group Automobiles S.P.A. and the Company, on 19 January 2015 the name of this company was changed to GAC Fiat Chrysler Automobiles Co., Ltd. (廣汽菲亞特克萊斯勒汽車有限公 司 )

“GAC Gonow” GAC Gonow Automobile Co., Ltd (廣汽吉奧汽車有限公司), a subsidiary incorporated on 8 December 2010 under PRC Law by the Company and Gonow Auto, and the Company holds 51% of its equity interest

“GAC Hino” GAC Hino Motors Co., Ltd. (廣汽日野汽車有限公司), a jointly controlled entity incorporated on 28 November 2007 under PRC law by the Company and Hino Motors, Ltd.

“GAC Leasing” Guangzhou Automobile Leasing Co., Ltd. ( 廣州廣汽租賃有限公 司 ), a subsidiary of GAC Commercial incorporated in February 2004 under PRC law

“GAC Mitsubishi” GAC Mitsubishi Motor Co., Ltd. (廣汽三菱汽車有限公司), a jointly controlled incorporated on 25 September 2012 under PRC law by the Company and Corporation

“GAC-SOFINCO” GAC-SOFINCO Automobile Finance Co., Ltd. (廣汽匯理汽車金 融有限公司), a jointly controlled entity incorporated on 25 May 2010 under PRC law by the Company and Société de Financement Industriel et Commercial (SOFINCO)

“GAMC” Guangzhou Automobile Group Motor Co. Ltd. (廣州汽車集團乘用 車有限公司), a wholly-owned subsidiary incorporated on 21 July 2008 under PRC law by the Group

37 “GAC Toyota” GAC Toyota Motor Co. Ltd (廣汽豐田汽車有限公司) (formerly known as Guangzhou Toyota Motor Co. Ltd (廣州豐田汽車有限公 司 )), a jointly controlled entity incorporated on 1 September 2004 under PRC law by the Company and Toyota Motor Company

“GAIG” Guangzhou Automobile Industry Group Co., Ltd. ( 廣州汽車工 業集團有限公司), which is a state-owned enterprise incorporated on 18 October 2000, and is the controlling shareholder of the Company

“Group” the Company, its subsidiaries, joint ventures and associated companies

“Guang Ai Brokers” Guangzhou Guang Ai Insurance Brokers Limited (廣州廣愛保險經 紀有限公司), a subsidiary incorporated on 7 June 2006 under PRC law, in which the Company accumulatively (directly and indirectly) holds 75.1% equity interest

“Guangqi Honda” Guangqi Co., Ltd. (廣汽本田汽車有限公司) (formerly known as Guangzhou Honda Automobile Co. Ltd (廣州 本田汽車有限公司)), a jointly controlled entity incorporated on 13 May 1998 under PRC law by the Company and Honda Motor Co. Ltd.

“Honda (China)” Honda Automobile (China) Co., Ltd. (本田汽車（中國）有限公 司 ), an associated company incorporated by the Company, Honda Motor Co. Ltd. and Dongfeng Motor Company on 8 September 2003 under PRC law, and the Company holds 25% of its equity interest

“Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited

“joint venture, joint joint venture companies under direct or indirect joint control, and enterprise, jointly the direct or indirect joint control causes no participating party has controlled entity” any unilateral control power over the economic activities of that jointly controlled entity

“MPV” multi-purpose passenger vehicle

“PRC” the People’s Republic of China

“RMB” Renminbi, the lawful currency of the PRC

38 “Securities Law” Securities Law of the PRC

“SSE” the Shanghai Stock Exchange

“SUV” sports utility vehicle

“Tong Fang Logistics” Tong Fang Global (Tianjin) Logistics Co., Limited（同方環球 （天 津）物流有限公司）, jointly established by the Company, China First Automobile Works Group and Toyota Motor Company in July 2007, and the Company holds 25% of its equity interest

“Urtrust Insurance” Urtrust Insurance Co., Ltd (眾誠汽車保險股份有限公司), a subsidiary incorporated on 8 June 2011 under PRC law, and in which the Group totally (directly and indirectly) holds 60% equity interest

“Wuyang-Honda” Wuyang-Honda Motors (Guangzhou) Co., Ltd. a jointly controlled entity jointly established in 1992 by the Company, Honda Motor Co. Ltd. and Honda Technology & Research Industry (China) Investment Co., Ltd., in which each company holds 50% equity interest

By order of the Board Guangzhou Automobile Group Co., Ltd. Zhang Fangyou Chairman

Guangzhou, the PRC, 26 August 2016

As at the date of this announcement, the executive directors of the Company are ZHANG Fangyou, ZENG Qinghong, YUAN Zhongrong, FENG Xingya, LU Sa and WU Song, the non-executive directors of the Company are YAO Yiming, CHEN Maoshan, LI Pingyi and DING Hongxiang, and the independent non-executive directors of the Company are FU Yuwu, LAN Hailin, LI Fangjin, LEUNG Lincheong and WANG Susheng.

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